The Future for the World Market of Hydrocarbons and MENA

1. The Future for the World Market of Hydrocarbons and MENA 20 of March 2019 Professor Leonid Grigoryev

WWW.LEONIDGRIGORYEV.COM

2. MENA – key countries

2

3. Population total, 2005-2017

Algeria
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
Kuwait
Saudi Arabia
120000000
100000000
80000000
60000000
40000000
20000000
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

4. Population growth, 2005-2017 (annual %)

Algeria
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
Kuwait
Saudi Arabia
7
6
5
4
3
2
1
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

5. GDP nominal growth,2005-2017 (annual %)

Algeria
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
Kuwait
Saudi Arabia
20
15
10
5
0
2005
-5
-10
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

6. GDP growth, constant 2010 US$ (annual %)

Algeria
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
Kuwait
Saudi Arabia
20%
15%
10%
5%
0%
2005
-5%
-10%
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

7. GDP per capita, 2005-2017 (current US$)

Algeria
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
Kuwait
Saudi Arabia
60000
50000
40000
30000
20000
10000
0
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017

8. GDP per capita, PPP (current international $)

Algeria
Egypt, Arab Rep.
Iraq
Iran, Islamic Rep.
2008
2010
2011
Kuwait
Saudi Arabia
100000
90000
80000
70000
60000
50000
40000
30000
20000
10000
0
2005
2006
2007
2009
2012
2013
2014
2015
2016
2017

9. Export Incomes in OPEC countries and Russia, bln. $, 2000-2017

OPEC
4 gulf countries
OPEC without 4 gulf countries
Russia (oil)
Russia (oil products)

10. Conclusions

Oil prices of $55 - $70 helped to Global growth restoration in 2016-2018.
Global forecast for 2040 is still open page. May be 110 mbd. of oil extraction.
Incomes are more important than records of output.
Energy transition is inevitable, but speed and scope are not rigid.
Investments needs for transition, reducing energy poverty are huge.
China, India and Africa are still in coal…
Emission of GHG is still growing, Paris 2015 is to be reviewed soon.
OPEC+ - to reinvest export incomes into development, beware demography.

11. World Energy Transition and Future

•World is undergoing Energy transition, but still not that fast as Green people hope.
•Current oil prices are secured the Global Growth in 2016-2018.
•Car are still mostly non-electric in stock and in annual sales.
•Energy sector and any changes in its structure require huge investments.
•One mbd a day per year = looking to 100 mbd in 2019.
•Climate Change prevention V Energy Poverty and Development needs …
•American oil takes quite a bite from others in 2018.
•Prices are stable due to growing demand and decline of output.
•Sanctions as a factor of pricing – Fall of 2018.
• Stability of pricing corridor depends on coordination – to assure price wars avoidance.

12. Current situation

13. Carbon Dioxide Emissions, 1985-2017

10
Китай
США
Индия
Япония
Россия
ОЭСР (искл. США и Японию)
Развив. (искл. Китай, Индия, Россия)
9
8
млрд т CO2
7
6
5
4
3
2
1
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
0
13
Source: BP Stat. Review 2017

14. Oil Prices and World Oil Extraction, 2014-2018

Brent price
Oil extraction (right axis)

15. Oil Extraction by countries, 2014-2018

Russia
USA
Saudi Arabia
Iran (right axis)
Venezuela (right axis)

16. Oil Production and Exports by country, 2016

Oil production
Exports
USA
11,7%
1,1%
Russia
13,6%
11,5%
Saudi Arabia
13,8%
16,9%
OPEC
44,1%
56,6%
Source: OPEC Annual Statistical Bulletin

17. Oil Production and Consumption, 2017, million barrel a day

USA
Consumption volumes, mln
barrel a day
19,9
USA
Production volumes, mln
barrel a day
13,2
Europe (OECD)
14,4
Saudi Arabia
12
China
12,5
Russia
11,4
India
4,7
Canada
4,8
Japan
3,9
Iran
4,7
Russia
3,6
Iraq
4,6
Saudi Arabia
3,2
China
3,9
Brazil
3,1
United Arab Emirates
3,8
Korea
27
EU
3,5
Canada
2,4
OPEC
39,2
World
97,8
World
97,4
Consumers
Producers
Source: International Energy Agency

18. Global Balance and Future

19.

Global fuel mix is becoming more diversified, gas and RES
are demonstrating the highest growth (2016)
Primary energy demand by fuel
(in 2015 and increase by 2040),
Probable Scenario
Structure of primary energy demand by fuel in 2015 and in
2040, Probable Scenario
2040
mtoe
5 000
11%
2040
4 000
2015
3 000
3%
6%
2%
5%
4%
10%
27%
1%
31%
Oil
Gas
Coal
Nuclear
2 000
Hydro
28%
25%
1 000
Bioenergy
22%
24%
Other renewables
0
Oil
Gas
Coal
Nuclear
Hydro
Bioenergy
Other RES
Source: Global and Russian Energy Outlook-2016, ERI RAS-AC
19

20. The Structure of World Energy Consumption, 1971 and 2015, % total consumption

The Structure of World Energy Consumption,
20
1971 and 2015, % total consumption
Coal
Natural gas
Hydro
Oil and oil products
Nuclear energy
Renewable energy sources
20
Источник: МЭА

21. Carbon Dioxide Emissions, 1985-2017

10
Китай
США
Индия
Япония
Россия
ОЭСР (искл. США и Японию)
Развив. (искл. Китай, Индия, Россия)
9
8
млрд т CO2
7
6
5
4
3
2
1
1985
1986
1987
1988
1989
1990
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
0
21
Source: BP Stat. Review 2017

22. Global Energy Supply Investment in 2014 – 2035, IEA estimate (2014), bln USD-2012, by industry, by region

Total: 40 165 bln USD (year-2012 prices)
Source: IEA, World Energy Investment Outlook 2014

23. GDP and Primary Energy Consumption, annual growth rates, 1991 - 2017

GDP (PPP const. 2011, World Bank)
1991-2002 2003-2008
World
OECD
USA
EU
Japan
Non-OECD
Brazil
Russia
India
China
World
OECD
Non-OECD
Source: World Bank, BP
3,0
2,7
3,4
2,3
0,9
3,5
2,6
-2,2
5,8
10,2
2009
Primary energy consumption
2010-2017 1991-2002 2003-2008
4,7
-0,4
3,5
1,6
3,2
2,4
-3,5
2,0
1,4
0,5
2,2
-2,8
2,1
1,4
0,1
2,5
-4,3
1,5
0,4
0,1
1,2
-5,4
1,1
1,2
0,0
7,6
3,0
4,9
1,8
6,1
4,8
-0,1
0,4
3,5
4,4
7,1
-7,8
1,4
-2,8
1,3
8,0
8,5
6,8
4,4
6,6
11,6
9,4
7,6
4,5
10,5
Energy consumption (p. %) minus GDP (p.%)
-1,4
-1,5
-1,3
-1,8
-1,7
-1,4
2009
2010-2017
-1,6
-4,8
-4,8
-5,8
-8,6
1,4
-0,6
-4,7
7,5
4,4
1,6
0,1
0,0
-0,7
-1,4
2,7
1,6
0,6
4,9
3,3
-1,2
-1,4
-1,6
-1,9
-1,9
-2,1
23

24. Oil and Gas Consumption, annual growth rates, 1991 - 2017

Oil consumption
1991-2002 2003-2008
World
OECD
USA
EU
Japan
Non-OECD
Brazil
Russia
India
China
World
OECD
Non-OECD
1,4
1,2
1,5
0,5
-0,1
1,6
3,4
-6,1
6,1
6,7
2009
Gas consumption
2010-2017 1991-2002 2003-2008
1,5
-1,7
1,3
2,1
3,3
-0,3
-4,9
0,0
2,6
1,6
-0,5
-4,6
0,4
1,5
0,9
-0,1
-5,3
-0,9
2,6
0,9
-2,2
-10,4
-1,6
3,3
3,3
4,0
2,2
2,7
1,5
5,2
4,2
0,2
1,4
14,5
9,6
1,2
-4,1
1,5
-1,1
1,9
4,4
5,1
4,9
6,8
7,1
6,5
3,8
4,2
5,9
19,1
Oil / Gas consumption (poins %) minus GDP (points %)
-1,6
-3,1
-1,3
-2,1
-0,9
-1,4
-1,5
-2,7
-1,4
-2,0
-0,1
-0,8
-1,8
-3,4
-0,8
-2,1
-1,9
-2,3
2009
2010-2017
-2,8
-3,2
-1,8
-6,3
-6,7
-2,4
-19,5
-5,5
20,9
10,1
2,1
1,2
1,9
-1,6
2,4
2,8
4,6
0,1
-1,3
12,0
-2,4
0,4
-5,2
-1,4
-0,7
-2,0
*Calculated index
Source: World Bank, BP
24

25. Coal consumption and Electricity generation, annual growth rates, 1991 - 2017

Coal consumption
1991-2002 2003-2008
World
OECD
USA
EU
Japan
Non-OECD
Brazil
Russia
India
China
1,1
0,4
1,3
-2,7
2,7
1,8
1,1
-4,3
3,6
3,6
5,3
0,3
0,1
-1,8
2,4
8,4
1,4
-0,7
7,4
10,7
2009
-1,5
-10,5
-12,0
-11,9
-15,5
2,9
-19,3
-8,5
8,3
4,8
Electricity generation
2010-2017 1991-2002 2003-2008
0,5
-2,8
-5,6
-2,5
0,6
1,7
1,9
0,3
5,6
1,1
2,7
2,2
2,1
1,6
1,8
3,5
3,6
-1,6
6,0
8,5
3,8
1,6
1,2
0,9
1,6
6,9
4,9
2,6
5,4
12,8
2009
2010-2017
-0,8
-4,0
-4,2
-4,9
-5,9
2,9
0,7
-4,5
6,2
6,3
2,4
0,0
-0,4
-0,3
-1,8
4,6
2,0
0,7
6,9
6,4
-0,4
-0,5
-0,1
-1,1
-1,9
-0,2
Coal consumption / Electricity generation (p %) minus GDP (p %)
World
OECD
Non-OECD
*Calculated index
Source: World Bank, BP
-1,9
-2,3
-1,6
0,5
-2,1
0,7
-1,2
-7,3
-0,1
-2,9
-4,7
-3,0
-0,4
-0,5
0,0
-0,9
-0,8
-0,6
25

26. Global Energy Balance mln tons, 2015

26
Production
Import
Export
Stocks
(reserves)
change
Coal
3865,0
791,7
820,3
-7,1
3829,2
28,1
Oil and oil products
4416,3
3562,1
3612,7
-31,3
4334,3
31,8
Natural gas
2975,7
868,7
883,4
-17,2
2943,7
21,6
Nuclear energy
670,7
0,0
0,0
0,0
670,7
4,9
Hydropower
334,4
0,0
0,0
0,0
334,4
2,5
Renewable energy sources (except hydro)
1519,6
20,7
16,6
0,3
1524,0
11,2
Total
13790,0
5307,9
5395,5
-55,1
13647,4
100,0
Consumption
The share in
consumption%
Источник: МЭА

27. Literature 1

1. Григорьев Л.М., Чапыгина А.В. «Саудовская Аравия – нефть и развитие», «Мировая Энергетическая
политика», №7, 2002.
2. Григорьев Л.М., Крюков В.А. «Мировая энергетика на перекрестке дорог: какую дорогу выбрать России?»
- «Вопросы экономики», №12, 2009.
3. Россия, Газпром и Центральная Азия-Центр: интересы и отношения. В “Russian Energy Security and Foreign
Policy”, Ed. By A. Dellecker and Th. Gomart, London and New York, IFRI, Routledge, 2011, стр.147-169.
4. «Энергетические субсидии в современном мире». Страны «Группы двадцати», под редакцией Л. М.
Григорьева, А. А. Курдина –, АЦ, 2014.
5. Григорьев Л.М., Курдин А.А. «Дисбаланс нефтяного рынка: технологии, экономика, политика.» «Энергетическая политика», №1, 2015.
6. «Прогноз энергетики мира и России до 2040 года», Научный руководитель А.А.Макаров, Т.А.Митрова,
Л.М.Григорьев и др. ИНЭИ РАН и АЦ, М. 2016.
7. Л.М.Григорьев , «Бочки миллиардов», «Нефтегазовая вертикаль», январь 2019, стр. 74-79.

28. Literature 2

“Domestic Debates on Climate in Russia”, L.Grigoryev, I.Makarov, A.Salmina, “Climate
Change, Sustainable Development, and Human Security”, Ed. Dhirendra K. Vajpeyi,
Lexington Books, 2013, chap. 9, pp. 249-280.
2018
Outlook
for
Energy:
A
View
to
2040
[online]
IEA:
http://cdn.exxonmobil.com/~/media/global/files/outlook-for-energy/2018/2018-outlook-forenergy.pdf.
Макаров И.А., Соколова А.К. «Оценка углеродоемкости внешней торговли России»,
«Экономический журнал ВШЭ», №3, 2014.
I.Makarov and A. Sokolova “Carbon EmissionsEmbodied in Russian trade:
implications for Climate Policy” - Review of European and Russian Affairs 11 (2),
2017.